German Chancellor Angela Merkel early on Wednesday agreed to form a coalition government with the Social Democrats, negotiation sources told reporters, two months after her conservatives won elections but fell short of a full majority.

Angela Merkel’s top foreign affairs and intelligence advisers will quiz officials in Washington on Wednesday over the activities of US spies in Germany, including allegations they tapped the German chancellor’s phone.

US President Barack Obama was personally informed of mobile phone tapping against German Chancellor Angela Merkel, which may have begun as early as 2002, German media reported yesterday as a damaging espionage scandal widened.

Chancellor Angela Merkel was strongly favoured to win a third term at the helm of Europe’s biggest economy as Germans voted in a national election Sunday, but the popular conservative’s hopes of governing with centre-right allies for another four years were in the balance.

German Chancellor Angela Merkel has criticised Damascus allies China and Russia for blocking a Western-backed UN text demanding that inspectors probing chemical weapons use in Syria be given unfettered access.

Chancellor Angela Merkel on Wednesday hosts EU talks on felling sky-high youth unemployment less than three months before German elections after coming under fire for championing austere spending cuts and helping to create a “lost generation”.

Germany told the European Commission yesterday that it rejected a proposal to slap tariffs on Chinese solar panel imports. Chancellor Dr Angela Merkel had pledged earlier during a visit by Premier Li Keqiang to take steps to avoid a brewing trade war between China and the European Union.

A luxury golf bag, a statue of Abraham Lincoln and an Australian rules football jersey formed part of a treasure trove given to US President Barack Obama in 2011. The list of presents given to Obama by foreign governments or dignitaries released by the US State Department on Thursday revealed an Aladdin's cave of gifts, ranging from the modest to the lavish.

The German parliament yesterday approved an international bailout package for stricken euro-zone member Cyprus by a large majority. A final tally by the Bundestag lower house showed 486 deputies voted for the measure, with 103 against and 11 abstentions.

German Chancellor Dr Angela Merkel's coalition yesterday defeated an election-year opposition bid to set a quota for female board members, in a vote that exposed a party rift and forced her to give ground.